Delhi-based VAS Data Services Pvt. Ltd, which runs fashion e-commerce firm Yepme.com, has raised an undisclosed amount in funding from listed garment exporter Gokaldas Exports Ltd (GEX).
The firm will use the funds for the operations of its UK entity, Yepme UK Plc which deals in fashion products exclusively for the international markets, mainly the US, Europe and the Middle East.
The deal will help GEX get an exposure to digital sales channels and online marketing tools, it said in a stock market disclosure.
Earlier this month, Yepme raised Rs 4.5 crore (around $700,000) in bridge funding by issuing optionally convertible debentures to Kolkata-based Rainbow Digital Services Pvt. Ltd and Noida-based ILearnFinance Academy Pvt. Ltd, according to documents filed with the Registrar of Companies (RoC).
In September 2015, it raised $28.6 million from Malaysia’s Khazanah Nasional Berhad, according to VCCEdge, the data research platform of News Corp VCCircle.
In September 2014, it raised $32.5 million from Helion Venture Partners II LLC, Capricorn Capital Partners and Morpheus Media Fund.
The firm was also reportedly in fundraising talks with Japanese internet conglomerate SoftBank in January 2015. But the talks fell through.
Of late, the startup has been in troubled waters with mass layoffs appearing imminent and salaries getting delayed for months altogether.
Several Yepme employees alleged in February that salaries were unpaid for several months and people were being forced to resign so as to avoid payment of a proper severance package.
In February, Yepme joined e-commerce giant Amazon’s global selling programme, under which its fashion products will be sold in key European markets such as the UK, Germany, France, Italy and Spain.
Losses at the company have been mounting, with expenditure steadily rising. In FY2015-16, VAS Data Services posted net sales of Rs 104.1 crore and a loss of Rs 183.8 crore. In FY2014-15, it registered net sales of Rs 81.4 crore and a loss of Rs 106.3 crore, according to filings with the RoC. Total expenditure rose from Rs 187.9 crore in FY2014-15 to Rs 290.3 crore in FY2015-16.
The company was founded in 2010 by Sandeep Sharma (COO and CTO), Vivek Gaur (CEO) and Anand Jadhav. Sharma is an IIM Bangalore alumnus who had previously worked at Accenture, Sapient and HCL. An IIM-Lucknow alumnus, Gaur had earlier worked at HT Media, Living Media India and Hindustan Unilever. Jadhav is also an IIM Lucknow alumnus and had previously worked at Omved Lifestyle, Reliance Retail and Infiniti Retail.
Last month, VCCircle reported that private equity giant Blackstone is exiting its decade-old investment Gokaldas Exports Ltd by selling its remaining 39.96% stake for Rs 58.61 crore ($9 million) to a group of investors including its former executive Mathew Cyriac.
Cyriac, along with his partners, had offered to buy the additional stake from the public shareholders for up to Rs 58 crore.
Cyriac, who quit as co-head of private equity for Blackstone in India early this year, was previously representing Blackstone as an investor director on the board of Gokaldas Exports. In March, he disassociated himself as a nominee director but continues to be a director.
Blackstone had invested in the company in 2007, just months before the stock market tanked, at Rs 275 a share. It had bought a majority stake in the company for Rs 485.2 crore and later hiked its holding through an open offer.
The private equity major had sold around 10% stake in Gokaldas Exports three years ago and last year took advantage of the climbing share price to offload around 18% stake more.
Gokaldas Exports was affected by the global slowdown as it was dependent on its exports business to the developed markets.
The firm’s revenues remained almost flat at around Rs 1,100 crore in the last eight years with a small dip in between. It moved from net profit of Rs 47.8 crore in the year ended March 31, 2008 to net loss of Rs 132 crore in 2011-12. It came out of the red in 2014-15 after five straight years of loss.
For the year ended March 31, 2016, it clocked net sales of Rs 1,142.9 crore with a net profit of Rs 61.3 crore.
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